IRS Extends Filing Deadline For Tax Returns
On March 21, 2020, the Internal Revenue Service released Notice 2020-18, providing information and guidance to taxpayers as the United States addresses the global COVID-19 (Wuhan coronavirus) pandemic. President Donald Trump issued an emergency declaration on March 13, 2020, empowering Treasury Secretary Steven Mnuchin to grant certain relief to taxpayers as more and more sectors of the U.S. economy are shuttered or otherwise contracted to slow the spread of the virus.
This notice restates and supersedes IRS Notice 2020-17, which we had reported on previously, and grants greater aid to affected taxpayers. Under Notice 2020-18, any person or business with a federal income tax return or payment due on April 15, 2020, is affected by the COVID-19 emergency and is an "Affected Taxpayer".
The Latest Tax Filing Deadlines
The following actions have been taken by the Treasury Department to grant relief to taxpayers:
- For an Affected taxpayer, the due date for filing federal income tax returns and related income tax payments due April 15, 2020, is automatically postponed to July 15, 2020. This includes federal estimated tax payments for the 2020 tax year. Late filing and late payment penalties and interest will not begin to accrue on such payments until July 16, 2020.
- Affected taxpayers do not have to extend their returns with Form 4868 (individuals) or Form 7004 (entity returns) to receive this extension of time.
- The prior limitation on the amount of payment deferred, $1 million for individuals and $10 million for corporations, has been removed. There is no limitation on the payment amount and any amounts ordinarily due on April 15 may be delayed without penalty.
- The filing deadline is NOT extended for federal information returns (1099 series, etc.)
- As before, only income and self-employment taxes are affected by this relief. The payment or deposit of other types of tax should be paid as scheduled.
Taxpayers owed a refund by the IRS are still encouraged to file their returns and claim their refunds.
Our Tax Filing Recommendation
We realize that each taxpayer has a different, situation especially during these difficult times. With that consideration, our recommendation is to continue working towards the tax deadline as if it was still April 15th.
This way we will be able to more quickly evaluate your position and recommend the course of action that is most beneficial to you.
If you are to receive a refund, we can file your return so you receive the payment as soon as possible. If you will owe taxes, we can proactively determine the amounts and then make plans for payment closer to the new deadline.
We understand that in these times there can be information overload, especially when the world is changing around us on a seemingly daily basis. MRPR stands ready to help you with tax planning and tax filing.